This week (Sep 9–11) brings a full slate of PPI and CPI data just ahead of the Fed’s September 15–16 meeting, where a rate hike is currently priced at roughly 70% following Chair Kevin Warsh’s hawkish Jackson Hole remarks.
The read-through rule this week: hotter-than-expected data strengthens the case for a hike → USD and yields rise → gold comes under pressure. Cooler-than-expected data eases that pressure and supports gold.
Core CPI y/y — the Fed’s most closely watched gauge — is forecast to ease slightly to 2.4% from 2.5%, a potentially rare bright spot for gold this week. CPI m/m and both PPI readings, however, are forecast higher than their prior readings, tilting toward downside pressure on gold if actuals match or exceed forecasts.
Bottom line: expect gold to trade data-point to data-point this week rather than follow one clean trend, with the rate-hike odds swinging on each release.